Knappster: Secrets of the Augustine defense

By George Knapp

Nevada Controller Kathy Augustine is back at work this week for the simple reason that she hired the right lawyers. Augustine was political toast as recently as a few weeks ago. Even her few friends were ready to stick a fork in her. Now, she's not only back on the job but talking (perhaps unrealistically) about running for higher office.

Augustine has Dominic Gentile of Las Vegas and John Arrascada of Reno to thank for saving her hide. The two lawyers, aided by a behind-the-scenes team of other attorneys and Las Vegas PR man Mark Fierro, began the monumental task of turning things around for the controller, whose public image hovered somewhere between those of Lucretia Borgia, Leona Helmsley and that crazy lady who drowned her kids. Judging from some of the testimony heard during Augustine's impeachment trial, the above assessment isn't exactly without foundation. (My colleague Jon Ralston overheard a suggested punishment for Augustine's ethical transgressions: Drop a house on her.)

A lot has been written about the Augustine case by people more qualified than yours truly to evaluate what it all means. But allow me to fill in some of the blanks concerning how and why her defense succeeded.

First of all, the decision to, in essence, plead guilty before the Ethics Commission was a strategic move. Augustine had no intention of admitting wrongdoing, even something as watered down as an admission that "she should have known" her employees were doing campaign work while on the state clock. But legal eagles Gentile and Arrascada knew they would eventually have to cross-examine the principal witnesses against Augustine. They also knew they only wanted to do it once. If they had gone through a full public hearing before the Ethics Commission, the witnesses likely would have been more prepared and more at ease in the next venue, whether that was in court or before state lawmakers.

Gentile and Arrascada made the tactical decision to bite the bullet, sign a deal with the commission and then take their fight to the state Senate, where they might be given greater latitude in their cross-examination of the principal accusers. From what I've heard, it wasn't easy to talk their client into this deal, not by a longshot. The lawyers say they were never serious about the offer to have Augustine resign. It was only suggested as a way of testing the resolve of the attorney general's office. (Seriously, can anyone imagine Augustine voluntarily resigning?)

The defense questioning of Augustine's former employees was simply devastating. It became pretty clear that the controller's office was a hotbed of plots, backstabbings, conspiracies and other intrigues. It's a wonder anyone got any work done at all considering how much time was spent bitching, moaning, griping and plotting. Augustine now says the entire case against her stemmed from a few disgruntled employees, and while that appears to be true, it's also true that those employees had plenty of good reasons to be disgruntled. It's a wonder someone didn't slice Augustine's tires or slip a few roofies into her Mr. Pibb. She may be an efficient manager, but she doesn't sound like a very nice person.

Contrary to what her lawyers told reporters in Carson City, there was no chance that Augustine would ever testify personally. It wasn't going to happen, even if her attorneys hadn't been so successful in exposing the petty allegations and personal motives of the principal accusers. Once Gentile and Arrascada sliced the witnesses into tiny pieces, it became apparent they wouldn't need to mount a defense of their own, which was something of a relief.

"Our witnesses were ready, but we were hoping we wouldn't have to pull the trigger," says Gentile. The cagey attorney had two basic strategies in mind: one passive, one aggressive. The passive strategy would have called Dennis Arnoldy, a former FBI agent who was ready to testify that Augustine passed a polygraph exam when she denied ordering her employees to conduct campaign business on state time. Another witness would have been UNLV English professor John Irsfeld, who was prepared to offer his opinion about the written materials found in state computers.

The aggressive strategy would have been far nastier. Augustine's team was ready for a scorched-earth defense, the "everybody-does-it" approach that likely would have tarred the reputations of other constitutional officers who may have committed the same sort of offenses. Some of those potential witnesses were strategically placed in the back of the hearing room as a reminder to everyone what carnage might be coming. It certainly didn't hurt the defense's cause, but the team was relieved it didn't have to go that far. (Not as relieved as some other folks, no doubt.)

Augustine wasn't exactly repentant after the Senate handed down its censure. I asked her if she had given any thought to mellowing out a bit when it comes to her treatment of her employees. It seemingly had not occurred to her that the whole affair would never have gotten this far if she had not been such a mean, condescending boss. "No, it will be business as usual," she told me.

Her lawyers have advised Augustine that she remains highly vulnerable to other complaints from her employees. They suggested she should gather her 40 or so workers for a heart-to-heart talk, if not a group hug, and that she should at least reconsider her management style. I have my doubts about whether she will accept this advice.

One thing we may never know is how Augustine could possibly afford the legal team assembled for her defense. Arrascada worked on the case for eight months. Gentile, one of the most expensive lawyers in town, had four of his employees working on the case. PR/media consultant Mark Fierro isn't cheap either. So how does a public servant making a mere 80 grand a year pay for all this? The lawyers have declined to say how much they charged. Maybe they gave Augustine a break because they knew there would be a large amount of publicity surrounding the whole thing, and that it would be fun to be involved in a groundbreaking legal tussle like this one.

Whatever the defense team charged her, Augustine can't possibly pay them enough. Against considerable odds, they saved her bacon. Although the impeachment could be viewed as a waste of considerable time and public money, maybe something good will yet come from it. New ethics reforms? A clear warning to other officials about campaigning while on the public dime? Or at least a recognition that the employee you bitch-slap today might be in the witness box tomorrow.

Galardi and G-Sting

Some media pseudo-pundits have already determined that topless club owner Mike Galardi isn't a credible witness, even though these self-appointed experts have no idea what testimony Galardi has offered to give, except for what they have read from their better-informed competitors. It makes sense to question Galardi's credibility, and that will certainly happen in upcoming political corruption trials. What doesn't make sense it to declare at this point that he is not be be believed about anything.

My own sense is Galardi may not be entirely accurate about the exact amounts of cash he handed out to various public officials. I think he also may not understand how the system works at times. (In some documents I read, he suggested that various inspectors did him a favor by giving him advance warning about pending inspections. Fire officials, for instance, routinely give advance notice to businesses that are going to be inspected.)

That said, federal prosecutors seem to think Galardi will be a formidable witness. As noted previously, Galardi passed four separate polygraph exams. In addition, much of what he has told the feds is backed up with documents and secret recordings. If the g-men didn't consider him to be reasonably credible, it's doubtful the G-Sting case would have even produced indictments, the opinions of uninformed armchair experts notwithstanding. Those critics who are dismissing Galardi out of hand at such an early stage are doing nothing more than some strategic ass-kissing, currying favor with those officials who have been named by Galardi but whose names have not yet been made public. Pucker up, because there are many more sphincter kisses to come.

Nevada Beverage update

The legal intrigue surrounding Nevada Beverage Co. just got more interesting. A federal judge has ordered that an independent audit of the company's finances should be undertaken to find out where all the money has gone. Owner Pat Clark Jr. is being sued by his three sisters for allegedly hiding, then squandering millions of dollars in family assets. Clark Jr. has vigorously denied the allegations but has been able to keep his books from being scrutinized. Soon, a court-appointed accounting firm will find out who is telling the truth. The Clark sisters are said to be thrilled with the judge's decision. Clark Jr. suggested his personal accountant, Marc Rich, should be the one to audit the books, an idea the judge soundly rejected.

Names and faces

I see where the Keeper of the Binion Flame can't quite let go of the Ted Binion murder case even though his orchestrated efforts to gain the convictions of Sandy Murphy and Rick Tabish have failed. (Earth to Keeper--a person can't be tried twice for the same crime.) I spotted the Keeper after the verdict was announced and he looked as if someone had punched him in the gut. An old man, perhaps? ... Plans to create a Las Vegas Chopper, a custom Harley-Davidson motorcycle that would be used during the Centennial celebration next year, have been nixed. Informed sources say the well-known cable TV guys who create customized motorcycle masterpieces turned Las Vegas down because they view our city as a place of vice and depravity, an unfit venue for the wholesome goodness of a revved-up hog. ... Hey, if you're looking for a unique Christmas gift ideas, how about this: a membership to the Nevada Test Site Museum, which is slated to open early next year. An individual membership is only $30. ... Former FBI mob-buster John Bassett has died. Bassett, who was 77, was a partner with late Mafia nemesis Bill Roemer and was involved in every major mob case aimed at the Chicago family in the '60s and '70s. Also passing on recently was Vincent Spilotro, the older brother of Vegas rackets boss Tony Spilotro.